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December 18, 2006

Second wave of corporate hospitals

Businessworld has a Cover Story on the second wave of corporate hospital chains - with a special focus on the Max, Fortis and Wockhardt groups - who are aggressively expanding their footprints based on the learnings from their initial forays.
Fortis decided to set up its first hospital at Mohali, Chandigarh, a market that didn’t have any other large, tertiary care private hospital. The idea was to attract patients from Himachal Pradesh, Haryana and Punjab. Simultaneously, it planned secondary care centres in other locations, which would be linked to the big Mohali hospital. It was a classic hub and spoke model.

Soon, Fortis realised that though the population in Chandigarh was prosperous, it wasn’t ready to accept a privately run hospital. Patients were used to visiting Post Graduate Institute of Medical Research (PGIMR) or else go to Delhi and sometimes even abroad, for treatment. Equally, the fact that in year one Fortis was just a cardiac care hospital didn’t help. People expected large hospitals to offer all specialties.

Fortis quickly changed tack. One, it built up other specialties and started offering multiple services till the secondary care level at Mohali. Two, it embarked on a brand building exercise to demonstrate its capabilities and create trust. It also figured that time wasn’t ripe yet for the hub and spoke model. Instead, it put up another multispecialty hospital at Amritsar, though smaller than the one at Mohali. And focused on OPD camps in smaller towns and villages. This has turned out to be a win-win for doctors, patients and Fortis. While patients get specialty opinion at no cost, local doctors co-opted in this process become primary care-givers. and start referring their patients to the Mohali hospital. Once the Mohali operations stabilised, Fortis turned its attention to the National Capital Region (NCR).

Arun Natarajan is the Founder of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.